JESSIE: Responsible ways to spend your federal stimulus check
You may have gotten or soon will be receiving an economic impact payment or so-called “stimulus check” that is the result of the Coronavirus Aid, Relief and Economic Security (CARES) Act.
These payments are meant to help offset the financial hardships for individuals and families caused by the COVID-19 pandemic.
Carefully consider what to do with this money before spending it.
Here are some ideas to help you get the most from your stimulus check.
1. Take care of the basics. If you have lost your job or have been laid off as a result of COVID-19, you may be struggling to take care of your basic needs, such as food, medicine and utilities. This money is intended to help you do that. If you are struggling, spend it on those items.
2. Get up-to-date on your bills. If you have fallen behind on your debts, you can use the stimulus as a chance to get caught up on those payments.
Make sure you prioritize your debts in order of the most urgent payments. The CARES Act included additional relief options for certain payments, such as federally-backed mortgages and student loans.
You can contact your lender to find out what your options are.
3. Build an emergency fund. If you are able to meet all of your debt obligations and provide for your family’s basic needs, consider saving the money in an emergency fund.
Just because you do not need the money right now does not mean you will not need it in the future.
An emergency fund can help you cover those unexpected expenses such as car repairs or major appliance purchases as they occur down the road.
4. Spend it wisely. If you decide to spend your stimulus check, make sure your purchase is a wise one, such as a home improvement, which could increase the value of your home, or job training or education that can help increase your income in the future.
5. Invest it. Make your stimulus money grow for your family’s future by investing it.
There are many different types of investments you can consider, including 529 college saving plans, traditional and Roth IRAs, certificates of deposit, stocks, bonds, etc.
You can find out more about these investment options online or by contacting your banker or financial advisor.
More information on family financial education topics is available by contacting the Jessamine County office of the University of Kentucky Cooperative Extension Service.
Source: Kelly May, senior extension associate for family finance and resource management. Karli Jessie is the agent for family and consumer sciences at the Jessamine County Cooperative Extension Service. She can be reached at firstname.lastname@example.org.